Ramsey Policy with Third Order Perturbation

Hi! Can we find Ramsey Policy (which requires the second-order perturbation in dynare) in a model economy that is hit by external shocks which require third-order perturbation?

Thanks for your time to respond to my question.


  1. No, Dynare does currently not support this.
  2. If you have shocks that require a third order solution, you cannot use a second order perturbation to compute welfare.

Thank you Professor for answering! That means, we need to follow IRFs and Simulated Moments to study the behavior of an economy due to the shocks that requires a third order solution? One of my professors told me to check if dynare++ can find welfare in case of uncertainty shocks. Could you please answer me whether switching to dynare++ can accomplish the goal?

Thank you once again for responding!